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August 06, 2007

The new face of angels

Businessworld has an article on the difference between the current angel investment "wave" versus the pre-2000, NRI-led one.
Unlike the largely expatriate angels who came to India in the late 1990s and invested in companies with a global focus, these new angels are lending a helping hand to fledgling enterprises that have the Indian market as its primary focus (at least for now).

...(Avnish) Bajaj of Baazee fame has made several small investments in many companies like Pangea3, Pinstorm, Orbit, Indus Biotech and Cleartrip. His investments range from Rs 10 lakh to Rs 20 lakh. “As a rule, I will not touch anything where I do not get between 0.5 per cent to 1.5 per cent of the stake,” says Bajaj. He and his peers also say they realise the main reason their expatriate predecessors failed was that they were hamstrung by the fact that they were largely absentee-investors, who merely introduced Indian start-ups to clients in the United States.

Hence, Bajaj and the new angels say that they are taking on a more strategic role in their companies, and helping them tap the potential of the domestic market so they can achieve critical mass before thinking of going global. This fits in well with the shift in focus of global IT, BPO and biotech companies, who are all looking at India as the next big growth market.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.